Mechel sells its Romanian plants to local co. Invest Nikarom SRL
MOSCOW. Feb 19 (Interfax) - OJSC Mechel has sold all five of its plants in Romania to the local company Invest Nikarom SRL.
"The deal price is symbolic at 230 Romanian leu [roughly $70]," a Mechel press release says.
Invest Nikarom SRL has obtained Ductil Steel Mechel, Campia Turzii S.A., Mechel Targoviste S.A., Mechel East Europe Metalurgical Division SRL, and Laminorul S.A.
"With the Romanian assets' planned loss of 2.4 billion rubles in 2013, this transaction will have a marked financial effect for our shareholders. The freed cash flow will be used for operational activities as well as decreasing the company's leverage," Mechel CEO Evgeny Mikhel is quoted as saying in the press release.
"Mechel notified investors in November 2012 that due to unfavorable prices in European steel markets linked to rising ferrous scrap prices and weak demand for finished products, production at Mechel's Romanian steelmaking facilities were temporarily halted. While production at these steelmaking facilities was temporarily suspended, all necessary measures were undertaken to retain the affected facilities' operational capability and to conduct maintenance works in an orderly manner," the press release said.
"The disposal of the Romanian steel assets is fully aligned with Mechel OAO's strategy aimed at development of its core businesses, particularly consolidating the group's leading position as a metallurgical coal producer," Mechel said.